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High Court Can Execute Foreign Arbitration

Award Despite Change In Pecuniary
Jurisdiction : Delhi HC [Read Judgment]
BY: MANU SEBASTIAN

DECEMBER 3, 2018 5:17 PM

121
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Odisha Govt Decides Advocate Petitions Triple Talaq
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Not To Prosecute Delhi HC For Better Ordinance: Bombay
Cases Against Abhijit Iyer Mitra, Management Of HC Grants
The Delhi High Court has held that jurisdiction to execute foreign arbitration award continues
Accepting His Apology Courts’ Websites, Told To Anticipatory Bail To Man Accused
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Delhi High Court Act.

In this case Precious Sapphires Ltd vs Amira Pure Foods Pvt Ltd, the Court was dealing with an
interesting interplay between the amendments made to Arbitration and Conciliation Act and
Delhi High Court Act, both in 2015. The execution petition was filed in High Court when it had
the pecuniary jurisdiction to deal with the matter. After 2015 amendment to Delhi High Court
Act, the pecuniary value of the matter came within the limits of Subordinate Court. However,
the 2015 amendment to Arbitration Act specifically stated that execution of foreign award
should be carried out in the High Court. This  amendment was made in the light of opinion
expressed in 246th Report of Law Commission of India that it is desirable for the High Courts
to deal with execution of foreign awards to ensure speedy and efficient execution.

The petitioners contended that amendment to Section 47 was retrospective in nature, and
proceedings could be continued in High Court. Reliance was placed on BCCI vs Kochi Cricket
Private Ltd  , where SC had held that 2015 Arbitration amendment had retrospective
application, being procedural in nature and hence applied to pending proceedings.

On the other hand, the respondents contended that 2015 amendment did not merely change the
forum, but also changed the scope of appeal. Therefore, the amendment was substantive in
nature, applying only prospectively. Hence, pending proceedings cannot take benefit of
amended Section 47. Reliance was placed on SC precedent in  Videocon International Ltd vs
SEBI to advance the position. The respondent pressed that the petition had to be transferred to
the Subordinate Court as per the amended pecuniary jurisdiction.

Justice Navin Chawla, the single judge who dealt with the issue, overruled the objection that
the execution petition had to be transferred to the Subordinate Court in view of the change in
pecuniary Odisha
jurisdiction following 2015 amendment.
Govt Decides The amendment to HighTriple
Advocate Petitions Court Act cannot
Talaq
affect the Not To Prosecute
provisions Delhi HC For Better
of Arbitration and Conciliation Ordinance: Bombay
Act, as it is a special statute. Hence,
Cases Against Abhijit Iyer Mitra, Management Of HC Grants
Arbitration
Accepting Act will prevail over High
His Apology Courts’Court Act.Told To
Websites, Anticipatory Bail To Man Accused
Approach HC Bar Ass’n Of Giving Instant Talaq To His
Wife
“It is first to be noted that the Arbitration and Conciliation Act, 1996 is a special statute vis-à-vis
the Delhi High Court Act, which would be a general statute dealing with the jurisdiction and
procedure of the High Court. It is well established principle of law that a special provision made
on a certain matter would exclude the general provision in its application, with the provision of
the special Act prevailing over  the provision of a general Act”,  Justice Chawla held in the
judgment.

Also, the objective of the amendment to Section 47 to give effect to Law Commission’s
recommendation cannot be defeated by a subsequent amendment to  a general law.

Reliance was placed on the SC precedent Kandla Export Corporation vs OCI Corporation,
which held that Arbitration Act was a self contained code prevailing over Commercial Courts
Act.

The contention that Section 47 amendment was substantive in nature was rejected. “I may
further add that the amendment in the Explanation to Section 47 merely affects the forum and
therefore, as held by the  Supreme Court in its judgments in Classic Credit Limited (supra),
is merely procedural in nature and unless the Amending statute provides otherwise, would have
a retrospective effect.”

It was held that present petition must continue before this Court and cannot be transferred to
the District Court by placing reliance on the Delhi High Court Act.

Odisha Govt Decides Advocate Petitions Triple Talaq

Not To Prosecute
Cases Against Abhijit Iyer Mitra,
Accepting His Apology
Delhi HC For Better
Management Of
Courts’ Websites, Told To
Approach HC Bar Ass’n
Ordinance: Bombay
HC Grants
Anticipatory Bail To Man Accused
Of Giving Instant Talaq To His
Wife
 WWW.LIVELAW.IN

* IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: 31.08.2018

Date of decision: 28.11.2018

+ EX.P. 330/2015 & E.A. No.387/2018

PRECIOUS SAPPHIRES LTD. ..... Decree Holder

Through Ms.Shyel Trehan, Ms.Akshita

Sachdeva and Ms.Sugandha Batra,
Advs.

versus

AMIRA PURE FOODS PRIVATE LTD. ..... Judgement Debtor

Through Mr.Akhil Sibal, Sr. Adv.with

Mr.Deepak Khurana, Mr.Tejasv
and Mr.Pradeep Chhindra, Advs.

CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA

1. This enforcement petition has been filed by the petitioner seeking

enforcement of the Foreign Award dated 04.04.2014 passed by the Sole
Arbitrator under the London Maritime Arbitrators Association Rules at
London.
2. It is not disputed that when the present petition was filed, this
Court had the pecuniary jurisdiction to entertain the same. Learned

EX.P.No.330/2015 Page 1
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senior counsel for the respondent has urged that with the promulgation of
the Delhi High Court (Amendment) Act, 2015 (hereinafter referred to as
the „Delhi High Court Act‟), read with the Notification/Office Order
dated 24.11.2015, this Court would lack pecuniary jurisdiction to further
entertain the present petition and, therefore, the same should be
transferred to the District Court.
3. On the other hand, the learned counsel for the petitioner submits
that in terms of Explanation to Section 47 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as the „Act‟) substituted
by way of the Arbitration and Conciliation (Amendment) Act, 2015
(hereinafter referred to as the „Amendment Act‟), it is only the High
Court having original jurisdiction which can hear petitions seeking
executions of the Foreign Award.
4. The question before this Court, therefore, is whether this petition
has to be transferred to the jurisdictional Subordinate Court or continue
to be entertained by this Court.
5. Before adverting to the arguments of the learned counsels in detail,
I would first quote the Explanation substituted in Section 47 of the Act
by way of Amendment Act:

“Explanation.—In this section and in the sections following

in this Chapter, “Court” means the High Court having
original jurisdiction to decide the questions forming the
subject-matter of the arbitral award if the same had been
the subject-matter of a suit on its original civil jurisdiction
and in other cases, in the High Court having jurisdiction to
hear appeals from decrees of courts subordinate to such
High Court.”
6. Before the substitution of the above Explanation to Section 47 of
the Act, the enforcement of Foreign Award under Part-II of the Act was

EX.P.No.330/2015 Page 2
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to be prayed before the “Court” as defined in the Explanation to Section

47 of the pre-amended Act, which is reproduced hereinbelow:
“Explanation- In this section and all the following
sections of this Chapter, “Court” means the principal
Civil Court of original jurisdiction in a district, and
includes the High Court in exercise of its ordinary
original civil jurisdiction, having jurisdiction over the
subject-matter of the award if the same had been the
subject-matter of a suit, but does not include any civil
court of a grade inferior to such principal Civil Court,
or any Court of Small Causes.”

7. A reading of the above two provisions would clearly show that

while prior to the amendment to the Act, the petition seeking
enforcement of a Foreign Award had to be filed before the Principal
Civil Court of original jurisdiction, the same now necessarily has to be
filed only before the High Court having original jurisdiction. The object
and purpose of this amendment has been explained in the 246 th Report of
the Law Commission of India in the following words:
“26. It is recommended that in the case of international
commercial arbitrations, where there is a significant foreign
element to the transaction and at least one of the parties is
foreign, the relevant “Court” which is competent to entertain
proceedings arising out of the arbitration agreement, should
be the High Court, even where such a High Court does not
exercise ordinary original jurisdiction. It is expected that this
would ensure that international commercial arbitrations,
involving foreign parties, will be heard expeditiously and by
commercially oriented judges at the High Court level. The
amendments proposed to section 48 (as indicated above) are
also intended to achieve the same object. This is important not
just for providing confidence to foreign investors, but to
mitigate the risk faced by the Government of India from

EX.P.No.330/2015 Page 3
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claims by foreign investors under the relevant Investment

Treaty negotiated by the Government of India with other
countries. The award of the Arbitral Tribunal in White
Industries Australia Ltd. v the Republic of India, UNCITRAL,
Final Award (November 30, 2011), serves as a reminder to
the Government to urgently implement reforms to the judicial
system in order to avoid substantial potential liabilities that
might accrue from the delays presently inherent in the
system.”

8. The learned counsel for the petitioner, placing reliance on the

judgments of the Supreme Court in Board of Control for Cricket in
India v. Kochi Cricket Pvt. and others 2018 SCC OnLine SC 232 and
Securities and Exchange Board of India v. Classic Credit Limited,
2017 SCC OnLine SC 961 and of the Gujarat High Court in M/s OCI
Corporation v. Kandla Export Corporation and Ors. 2016 SCC OnLine
Guj 5981, submits that a law which brings about the change in forum
being procedural, is presumed to be retrospective in nature, unless the
amending statue provides otherwise. She submits that Section 26 of the
Amendment Act does not mitigate against this rule and therefore, even
the pending proceedings have to continue only before the High Court.
She submits that applying the above rule, the Gujarat High Court has in
fact, directed that the Execution Petitions pending before the District
Court be returned to be filed before the concerned Commercial Division
under the Commercial Courts, Commercial Division and Commercial
Appellate Division of High Courts Act, 2015 or the concerned High
Court where the subject matter of an arbitration is a commercial dispute
but not of a specified value.

EX.P.No.330/2015 Page 4
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9. On the other hand, the learned senior counsel for the respondent,
relying upon the judgments of the Supreme Court in Fuerst Day Lawson
Ltd. v. Jindal Exports Ltd., (2001) 6 SCC 356, and Videocon
International Ltd. v. Securities and Exchange Board of India (2015) 4
SCC 33, submits that Section 47 to Section 49 of the Act provide for a
single proceeding for deciding enforceability of a Foreign Award.
Alongwith substituting the Explanation to Section 47 of the Act, the
Amendment Act has also made substantial changes in Section 48 of the
Act, limiting the grounds of challenge to a Foreign Award. He submits
that as there is a change in the forum coupled with the scope of challenge
to a Foreign Award, the same constitutes a package and, therefore, is a
vested substantive right of a litigant when a lis is initiated. He further
submits that as the Amendment Act does not expressly provide for
retrospective application of the amendment, the proceedings are to be
governed by the pre-amended Act and therefore, the petition deserves to
be transferred to the principal Civil Court of original jurisdiction in
accordance with the pecuniary jurisdiction and in terms of the Delhi High
Court Act. He submits that the judgment of the Supreme Court in BCCI
(supra) shall have no application to a Foreign Award as a Foreign Award
by itself cannot be enforced as a decree unless there is compliance with
Section 47 and 48 of the Act; such is not a case in a domestic Award
which was a matter of consideration before the Supreme Court in BCCI
(supra). He places reliance on the judgment of the Bombay High Court
in Noy Vallesina Engineering Spa v. Jindal Drugs Limited, 2006 SCC
OnLine Bom 545.

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10. Learned senior counsel for the respondent has further placed
reliance on the judgment dated 12.01.2018 passed by the Punjab and
Haryana High Court in LPA No.917/2017 titled Alpine Minmetals India
Pvt. Limited v. Noble Resources Limited & Anr. and submits that the
Punjab and Haryana High Court has held that the provisions of the
Amendment Act will not have any retrospective effect and therefore, the
enforcement proceedings initiated prior to the amendment would
continue before the District Court which had the jurisdiction to entertain
the same prior to the amendment. He submits that the judgment of the
Punjab and Haryana High Court has been affirmed by the Supreme Court
with the dismissal of the Special Leave Petition, being SLP (C) No.
7263/2018, on 08.05.2018.
11. I have considered the submissions made by the counsels for the
parties. In the present case, the enforcement petition was rightly
instituted before this Court under the pre-amended Act. Under the Delhi
High Court Act, as amended with effect from 26.10.2015, read with the
Notification/Office order dated 24.11.2015, based on the pecuniary
value, the same has to be transferred to the District Court. The only
question, therefore, is whether the Amendment Act, which came into
effect on 23.10.2015, would have any effect on such transfer of the
petition. In my opinion, with the coming into force of the Amendment
Act, the present petition cannot be transferred to the District Court.
12. It is first to be noted that the Arbitration and Conciliation Act,
1996 is a special statute vis-à-vis the Delhi High Court Act, which would
be a general statute dealing with the jurisdiction and procedure of the
High Court. It is well established principle of law that a special

EX.P.No.330/2015 Page 6
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provision made on a certain matter would exclude the general provision

in its application, with the provision of the special Act prevailing over
the provision of a general Act. This principle is expressed in the maxims
Generalia Specialibus Non Derogant and Specialia Generalibus
Derogant. Reference can be drawn to the judgment of the Supreme Court
in Jogendra Lal Saha v.State of Bihar and others, AIR 1991 SC 1148
and P.V Hemalatha v. Kattamkandi Puthiya Maliackal Saheeda and
others, AIR 2002 SC 2445.
13. The object and intent of the legislature in substituting the
Explanation to Section 47 of the Act can be found in the 246th Report of
the Law Commission, which has been reproduced hereinabove. The
provision therefore, clearly intended to ensure that all challenges to a
Foreign Award are made only before the High Court. Such intent cannot
be defeated by applying a subsequent general law. In view of the above,
the provisions of the Delhi High Court Act cannot be made applicable to
the petitions seeking enforcement of the Foreign Awards.
14. In Kandla Export Corporation and Anr. v. M/s OCI Corporation
and Anr., 2018 SCC OnLine SC 170, the Supreme Court relying upon its
earlier judgment in Fuerst Day (supra) held that Section 13(1) of the
Commercial Courts, Commercial Division and Commercial Appellate
Division of High Courts Act, 2015 being a general provision vis-a-vis
arbitration relating to appeals arising out of commercial disputes, would
obviously not apply to the case of Section 50 of the Act. Applying the
above ratio, it would be clear that the Delhi High Court Act would not
apply to the petitions seeking enforcement of a Foreign Award under the

EX.P.No.330/2015 Page 7
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Arbitration and Conciliation Act, 1996 as amended by the Amendment

Act.
15. I may further add that the amendment in the Explanation to
Section 47 merely affects the forum and therefore, as held by the
Supreme Court in its judgments in Classic Credit Limited (supra), is
merely procedural in nature and unless the Amending statute provides
otherwise, would have a retrospective effect. Section 26 of the
Amendment Act provides for the application of the Amendment Act and
reads as under:
“26. Act not to apply to pending arbitral proceedings.-
Nothing contained in this Act shall apply to the arbitral
proceedings commenced, in accordance with the
provisions of section 21 of the principal Act, before the
commencement of this Act unless the parties otherwise
agree but this Act shall apply in relation to arbitral
proceedings commenced on or after the date of
commencement of this Act.”

16. Section 26 of the Amending Act does not exclude the application
of the amended Explanation to Section 47 of the Act to proceedings
pending in High Court on that date.
17. Reliance of the senior counsel for the respondent on the
amendment carried out in Section 48 of the Act as also on the judgments
of the Supreme Court in Fuerst Day Lawson Ltd. (supra) and of the
Bombay High Court in Noy Vallesine (supra) cannot be accepted. It is
first to be noted that though the provisions from Section 47 to 49 of the
Act have been held to be a single proceeding for deciding enforceability
and execution of a Foreign Award, Explanation to Section 47 of the Act

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merely and separately provides for the forum where applications seeking
enforcement of the Foreign Award are to be filed. Section 48 separately
lays down the conditions where the enforcement of a Foreign Award may
be refused. The same has no effect on the forum, unlike in the case of
Videocon International Limited (supra) where change in the forum and
the power of the Appellate Court were intertwined and formed part of
one single package. The question before this Court is not whether the
provisions of the amended Section 48 of the Act would apply to the
present proceeding which was pending as on the date of the amendment.
Equally, the question whether the enforcement petitions pending before
the District Court on the date of the amendment are to be transferred to
this Court, is not a question to be decided in this petition. I therefore
refrain from making any observation in that regard. However, clearly
applying the above principle laid down by the Supreme Court, the
present petition must continue before this Court and cannot be
transferred to the District Court by placing reliance on the Delhi High
Court Act.
18. With the above observation, the objection of the respondent
insofar as the issue of continuation of present proceedings before this
Court, is rejected.
List on 10th December, 2018 before the Roster Bench for further
proceedings/direction in the petition.

NAVIN CHAWLA, J

NOVEMBER 28, 2018/Arya

EX.P.No.330/2015 Page 9